Friday, April 10, 2015

MALAYSIA:::EPF considering withdrawal of savings at 60

Employees Provident Fund (EPF) is considering changing the permissible age for members to withdraw their savings from the current 55 years to 60 years, the societal age for retirement.

EPF CEO Datuk Shahril Ridza Ridzuan says the deliberation is based on the fact that, on average, people exhaust their retirement savings within 3-5 years after a full withdrawal from EPF.

"Roughly about 70% of people who withdraw their retirement savings in full, will essentially deplete the money within three to five years time.

"Malaysians now make the withdrawal first (at 55) before actually retiring (at 60), and we are looking at this issue for the right policy response," Shahril told a media briefing today in conjunction with the release of the pension fund's 2014 Annual Report.

This disjunction between the age at which contributors can withdraw their savings and when they retire, means contributors are expending and eating into their savings five years before they retire.

He said while the EPF recommended an amount of at least RM196,800 upon retirement, only 22% of contributors met this minimum last year.

Even the sum of RM196,800 will amount to a monthly income of RM820 for 20 years until age 75, just about at the poverty threshold of RM830 per month in 2012 declared by the Statistics Department.

Even this barely adequate amount will be a challenge for many EPF contributors to meet. Shahril points out the alarming figure that 68% of EPF members, aged 55 and five years away from retirement, had less than RM50,000 in their accounts, barely a quarter of the recommended minimum total.

One of the responses of the EPF to this parlous situation is to start a pilot project in Kuala Lumpur and Petaling Jaya to offer advice on financial and retirement planning to its contributors. – April 10, 2015.

source:::http://www.themalaysianinsider.comhe Employees Provident Fund (EPF) is considering changing the permissible age for members to withdraw their savings from the current 55 years to 60 years to coincide with the societal age for retirement. – The Malaysian Insider pic by Najjua Zulkefli, April 10, 2015